ASIC has charged a Canberra-based mortgage broker for providing home loans to an unemployed 20-year-old man.
While working for ACT Mortgages, Kelvin Skeers organised two low documentation (low-doc) loans to a client who had no fixed address and no job.
Low-doc loans require no documentation from borrowers to prove the value of their income, assets and liabilities.
Although the client had inherited $240,000, he was refused finance from a number of lenders. Skeers, however, arranged two low-doc loans worth $356,025 and $401,897 and then distorted his client's financial position in the lending documents.
ASIC has charged Skeers with misleading and deceptive conduct for arranging the loans and has ordered him to pay prosecution costs.
"This case highlights that unscrupulous conduct in the mortgage industry is not acceptable and that mortgage brokers can be held responsible for arranging loans which the borrower has no capacity to repay," ASIC executive director of enforcement Jan Redfern said.
In August the Mortgage and Finance Association of Australia (MFAA) repeated its calls for the Federal Government to regulate predatory lenders in the low-doc loan market.
"We have lobbied the Federal Government since 2002 to regulate these predatory lenders who have been selling low-doc loans to people who are unable to afford them," MFAA chief executive Phil Naylor said at the time.
